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May 7, 2007

To our Customers:

A particularly strong and slow-moving storm system across the Plains states over the weekend of May 4-6 has caused significant damage to our rail network in this region. Rainfalls in the 5- to 8-inch range caused stream and river flooding that washed out some bridges and sections of track, and weakened others. Tornadoes, including the one that destroyed the community of Greensburg, Kansas, caused damage as well.

The immediate effects of these storms include:

Numerous subdivisions and corridors are intermittently out of service due to flooding and track washouts.

Trains that are operating in the area are on reduced speeds.

All types of trains - premium, manifest, bulk - are affected by these outages.

The coal mines in the Southern Powder River Basin in Wyoming also were hit with heavy rainfall this weekend, causing production at these mines to slow significantly. Many have standing water in the pit, which must be removed before the mines can operate at full capacity. This comes as the mines were beginning to recover from the mine outages caused by heavy rain and snow at the mines in April. As of Monday morning, we have more than 80 coal trains that are unable to move due to weather and related circumstances.

Unfortunately, the National Weather Service is predicting that more rain will fall this week. In some parts of the affected region, the forecast is for an additional 4 to 6 inches. Several rivers and streams are projected to reach flood crests in 2-3 days.

We estimate that our recovery will take about two weeks unless conditions worsen. We will keep you apprised as conditions change.